SEC imposes record $8.2B in fines in 2024, with Terraform Labs settlement accounting for over 50%.
2024 marks a 26% drop in SEC cases, but fines soar due to a $4.47B fraud penalty against Terraform Labs.
SEC distributes $345M to investors in 2024 while crypto-related cases see a sharp decline from the previous year.
The US Securities and Exchange Commission (SEC) generated a record $8.2 billion in financial penalties in fiscal year 2024. This is the agency's biggest annual total in history, according to its annual report released on November 22. Despite the record penalty, the SEC filed 26% fewer enforcement cases than the previous year, totaling 583.
https://twitter.com/Pegasusswap/status/1860707799275020550 Major Settlement with Terraform Labs
A large amount of the total fines were derived from a $4.47 billion settlement with Terraform Labs and its CEO, Do Kwon. The fine was imposed following the collapse of the Terra/Luna blockchain ecosystem in 2022, which resulted in massive investment losses. The SEC found Terraform guilty of deceiving investors, resulting in one of the agency's most prominent securities fraud investigations.
Without the Terraform deal, the SEC would have received $3.72 billion in penalties. This would have been the agency's lowest revenue since 2013, when it collected $3.4 billion.
Key Cases and Investor Protections
In addition to the Terraform case, other notable actions included a settlement with Silvergate Capital Bank. The bank was accused of failing to comply with disclosure rules related to cryptocurrency startups like FTX. The SEC also initiated action against BarnBridge DAO for failing to register its cryptocurrency holdings as securities.
Beyond penalties, the SEC distributed $345 million to harmed investors during the fiscal year. This raises the total cash returned to investors since 2021 to $2.7 billion. The agency also reported handling over 45,000 tips, complaints, and referrals. These included 24,000 whistleblower submissions, with awards totaling $255 million.
Transition in Leadership
SEC Chair Gary Gensler, known for his strict approach to cryptocurrency regulation, announced his resignation effective Jan. 20, 2025. His resignation coincides with the inauguration of President-elect Donald Trump.
During Gensler's tenure, the SEC adopted a strong position on crypto, with enforcement actions peaking in 2023. However, the number of cryptocurrency-related cases decreased to 11 in 2024, while fines in the industry climbed as a result of the Terraform settlement.
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